Royal Dutch Shell, the world's largest oil trader, will exit Iraq’s Majnoon oilfield, relinquishing its 45 per cent stake in “due course”, as it looks to focus on its gas and petrochemicals projects in the country. The move is likely to delay the expansion of the field and slowdown the country's production.
“Following extensive discussions with the Ministry of Oil, the oil minister of Iraq formally endorsed a recent Shell proposal to pursue an amicable and mutually acceptable release of the Shell interest in Majnoon, with the timeline to be agreed in due course,” a Shell spokesman said.
The company said that it remains committed to the country, but will look to increase its position in its joint venture with the Iraqi government, known as the Basrah Gas Company (BGC). The spokesman said: “By leaving Majnoon, Shell will be in a stronger position to focus its efforts on the development and growth of the Basrah Gas Company and the Nebras Petrochemicals Project.”
As a result of Shell's exit, target production capacity of 5.0mn barrels a day (bpd) by the end of 2017 will fall short, according to BMI Research. Current output at the field is 235,000bpd, with a 400,000bpd target by 2020.
Saad Al Haditihi, spokesman for Iraqi Prime Minister Haider al-Abadi declined to comment when reached by The National, saying the issue was not political and concerns the oil ministry. Iraqi Oil Minister Jabar Ali Al-Luaibi and Assem Jihad, the Iraqi Oil Ministry spokesman were not reachable by phone.
Disagreement over the contract terms underpins Shell's decision to leave Iraq, said Edward Bell, a commodities analyst at Emirates NBD.
“I’d imagine any negotiation would have been trying to get more revenue allocated to the government over the company and Shell may have decided it was no longer commercial,” he said.
This creates a tussle between the international oil companies demanding higher remuneration and Baghdad wanting further payment reductions to help offset lower oil prices.
“Shell has also mentioned that Baghdad started to apply a performance penalty to the Majnoon remuneration fees in May, which implies the returns have been cut and that has triggered Shell’s exit,” said Richard Mallinson, geopolitical analyst at UK-based Energy Aspects.
In addition, the oil company is looking to sell its stake in the West Qurna 1 field.
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Shell’s chief executive, Ben van Beurden, has been steering the company’s direction to focus more on gas since taking charge in 2014 coupled with the merger with BG.
Basra Gas Company was started in 2013 to treat natural gas that was previously flared. At the end of 2014, the company was processing 500 million standard cubic feet of gas per day with a liquefied petroleum gas (LPG) production record of 2,650 tonnes per day.
Iraq produces around 1 billion cubic feet of gas per day, but 70 per cent of that was flared due to a lack of infrastructure. Shell said that if it could take that flared gas and convert it into electricity, it would generate about 4.5 gigawatts which could supply power to three million homes. That also translates to US$3.5 billion into Iraq’s economy annually.
“Divesting the stakes in Iraqi oil fields would fit with these plans, although the fruitless negotiations with Baghdad were no doubt a factor in why Shell is looking to unload these particular assets,” said Mr Mallinson.
It remains unclear how Baghdad will address the exit of Shell. Russian and Asian national oil companies could step in and replace Shell. Finding foreign investors willing to invest in expanding output from southern fields according to the Iraqi government's commercial terms in the current low oil price environment will remain challenging.
“China’s CNPC is moving ahead with the Halfaya Phase 3 expansion, which is due online next year, after securing some concessions about repayment of expenditure, but that is the only major upstream project that appears to be moving ahead in the federally controlled parts of Iraq,” Mr Mallinson pointed out.
Contracts in the Kurdistan Regional Government (KRG) offer companies more attractive terms in addition to the regular payments that have been forthcoming.
“On paper the terms of these contracts are much more attractive than the model used in the south. But investors remain concerned about the financial stability of the KRG given the low oil price, particularly as the referendum could trigger renewed political tensions with Baghdad and thereby destabilise the fragile situation that current prevails,” Mr Mallinson said.
Company profile
Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
UAE currency: the story behind the money in your pockets
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How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Cultural fiesta
What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421, Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day.
RESULT
Bayern Munich 5 Eintrracht Frankfurt 2
Bayern: Goretzka (17'), Müller (41'), Lewandowski (46'), Davies (61'), Hinteregger (74' og)
Frankfurt: Hinteregger (52', 55')
The Florida Project
Director: Sean Baker
Starring: Bria Vinaite, Brooklynn Prince, Willem Dafoe
Four stars
TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi
UAE currency: the story behind the money in your pockets
DMZ facts
- The DMZ was created as a buffer after the 1950-53 Korean War.
- It runs 248 kilometers across the Korean Peninsula and is 4km wide.
- The zone is jointly overseen by the US-led United Nations Command and North Korea.
- It is littered with an estimated 2 million mines, tank traps, razor wire fences and guard posts.
- Donald Trump and Kim Jong-Un met at a building in Panmunjom, where an armistice was signed to stop the Korean War.
- Panmunjom is 52km north of the Korean capital Seoul and 147km south of Pyongyang, North Korea’s capital.
- Former US president Bill Clinton visited Panmunjom in 1993, while Ronald Reagan visited the DMZ in 1983, George W. Bush in 2002 and Barack Obama visited a nearby military camp in 2012.
- Mr Trump planned to visit in November 2017, but heavy fog that prevented his helicopter from landing.
The%20specs
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Scoreline
Arsenal 0 Manchester City 3
- Agüero 18'
- Kompany 58'
- Silva 65'
The specs: 2018 Mercedes-AMG C63 S Cabriolet
Price, base: Dh429,090
Engine 4.0-litre twin-turbo V8
Transmission Seven-speed automatic
Power 510hp @ 5,500rpm
Torque 700Nm @ 1,750rpm
Fuel economy, combined 9.2L / 100km
Company%C2%A0profile
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3EPyppl%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EEstablished%3A%20%3C%2Fstrong%3E2017%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EAntti%20Arponen%20and%20Phil%20Reynolds%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20financial%20services%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestment%3A%3C%2Fstrong%3E%20%2418.5%20million%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EEmployees%3A%3C%2Fstrong%3E%20150%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFunding%20stage%3A%3C%2Fstrong%3E%20series%20A%2C%20closed%20in%202021%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20venture%20capital%20companies%2C%20international%20funds%2C%20family%20offices%2C%20high-net-worth%20individuals%3C%2Fp%3E%0A
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
TEACHERS' PAY - WHAT YOU NEED TO KNOW
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools
- average salary across curriculums and skill levels is about Dh10,000, recruiters say
- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance
- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs
- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills
- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month
- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues
In Full Flight: A Story of Africa and Atonement
John Heminway, Knopff
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
Mohammed bin Zayed Majlis
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